Examiner Editorial: HUD should halt funding to ACORN fraudsters

More than a month ago, Congress passed a bill designed to protect taxpayers from funding the Association of Community Organizations for Reform Now. The left-wing activist group, which has received at leastt $53 million in government funds since 1994, is notorious for submitting fraudulent voter registrations and for allegedly commingling the finances of its nonprofit and political arms. More recently, a series of undercover videotapes caught ACORN employees abetting fraud and underage sex-trafficking.

Despite ACORN’s misfeasance, the Department of Justice has issued a legal opinion suggesting that the group can continue to receive taxpayer money despite the new law. Justice’s memo, written in mid-October but quietly released over Thanksgiving, came in response to inquiries by the Department of Housing and Urban Development. It argues that Congress’ ban on taxpayer money being “provided to” ACORN does not apply to HUD’s existing contracts with the group.

The real baffler is not Justice’s opinion but the fact that HUD would ask this question in the first place. The federal housing agency should not need a special law to cut off funding to a group caught on videotape advising mortgage applicants to commit fraud. In Brooklyn, ACORN employees told a prospective mortgage applicant to lie about her occupation and income. The employees’ disturbing justification — “Honesty is not going to get you the house” — suggests this is not the first time they have given such advice. In Brooklyn and in Baltimore, ACORN workers advised the same undercover filmmakers to lie on tax forms that are routinely submitted as part of any mortgage application.

Whether or not ACORN workers are prosecuted, the tape is sufficient grounds for withholding federal housing funds. If HUD grants are supposed to help the poor find affordable housing, why should the agency waste resources subsidizing dishonest operators? Other agencies that had previously paid ACORN for services to the poor, including the Internal Revenue Service, came to this conclusion already.

Congress cannot and should not arbitrarily invalidate legal contracts. But there is ample precedent for government cutting off dealings with fraudsters. Medicare and Medicaid blacklist doctors who cheat the system. The Department of Defense has canceled contracts based in fraud — for example, the sweetheart Boeing air tanker contract of 2001. Given his political ties to ACORN from his days in Illinois, it is in President Obama’s political interest to see that ACORN does not receive preferential treatment from any government agency. Otherwise, taxpayers should hold him personally responsible for wasting their money.